Question
In: Statistics and Probability
5. A car insurance company would like to determine the proportion of accident claims covered by...
5. A car insurance company would like to determine the proportion of accident claims covered by the company. According to a preliminary estimate 65% of the claims are covered. How large a sample should be taken to estimate the proportion of accident claims covered by the company if we want to be 95% confident that the sample percentage is within 2% of the actual percentage of the accidents covered by the insurance company?
Solutions
Expert Solution
Solution :
Given that p = 0.65 , margin of error E = 0.02
=> q = 1 - p = 0.35
=> For 95% confidence interval , Z = 1.96
=> Sample size n = p*q*(Z/E)^2
= 0.65*0.35*(1.96/0.02)^2
= 2184.91
= 2185 (nearest whole number)
orchestra answered 2 years agoRelated Solutions
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